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10 December 2021

Announcement on the start of the privatization process of 99.02% of the shares of the JSC Farg’onaazot

In accordance with the Presidential Decree PD-4992 of the Republic of Uzbekistan, dated 13 February 2021, “On measures to further accelerate privatization processes of state assets”, the State Assets Management Agency of the Republic of Uzbekistan (“UzSAMA” or “the Seller”) announces its intention to sell its 99.02% stake in the share capital of  JSC Farg’onaazot (“the Company” or “Farg’onaazot”) through the public negotiation invitation (“the Transaction”).

International consulting firm Deloitte TCF LLP (“Deloitte”) is acting as the lead consultant to UzSAMA on this Transaction. Additional assistance to the project is also expected from the International Finance Corporation (IFC).

Brief information about the Company:

JSC Farg’onaazot was established in 1962 and is currently one of the largest producers of mineral nitrogen fertilizers, defoliants and cellulose acetates in Uzbekistan. The enterprise consists of three main complexes:

  • Production of mineral fertilizers: large-capacity aggregate of ammonia AM-76, production of concentrated nitric acid NA-72M and ammonium nitrate AN-72M, production of urea;
  • Production of sodium chlorate and magnesium chlorate defoliant;
  • Production of cellulose esters and thread acetate.

Additionally, the Company operates workshops such as workshops for the production of nitrogen-phosphorus fertilizer NPhF, liquid fertilizer (KAS), liquid nitrogen and calcium fertilizer, fertilizer for greenhouse “Darmon”, sodium nitrate, sodium bicarbonate, polyethylene bags for packaging of fertilizers and others.  The total production capacity of the Company is 2.8 million tons of fertilizers per year.

The financial results of the Company demonstrate positive dynamics. In 2020, the Company's net profit amounted to 292.6 billion soums (in 2019, 220 billion soums), by the end of 2021 additional growth is expected, which will be reflected in updated indicators and uploaded to the data room (VDR), and will be available to potential investors upon execution of non-disclosure agreements (NDA).

Sale Process

The privatization of Farg’onaazot is organized as a competitive sale process open to all interested parties ("Participants"). Currently, Participants are invited to express their interest in the form of a letter of application (the “EOI”), including the following information:

  1. Brief information about the participants;
  2. A copy of the certificate of state registration;
  3. Consolidated audited financial statements for the last 3 years;
  4. Information about all shareholders (and their ownership interests) and ultimate beneficiaries;

The Expression of Interest may be prepared in Russian or Uzbek, at the discretion of the applicant, with mandatory translation into English. All applicants will be included in the register of potential bidders and will be informed about the next steps.

The deadline for submission of applications in the form of expression of interest is no later than 18:00 Tashkent time on February 18, 2022, to the following Deloitte e-mail addresses:

anagurnyi@deloitte.ru, azhetenova@deloitte.kz, rmukhametshin@deloitte.uz.

The application process is open to all Participants.

Additional Terms and Conditions

UzSAMA reserves the right to change the sequence of the sale process or to refuse to sell to or negotiate with any potential buyer(s) at any time without explanation.

This announcement, or any part of its contents, should not be construed as a form of commitment on the part of UzSAMA, the Company, and Deloitte with respect to the sale of the Company, which could be inferred from the publication of this announcement. UzSAMA  and Deloitte reserve the right, in their sole discretion, at any time and in any respect, without assuming joint or several liabilities.

(i) make changes to the application deadline;

(ii) follow different procedures with respect to various interested parties, and/or negotiate with one or more potential purchasers within the schedule and procedure provided jointly by UzSAMA, the Company, and Deloitte to the exclusion of any other potential purchaser(s) without prior notice;

(iii) terminate the sales process for any reason; and/or

(iv) terminate any discussions and negotiations with any potential buyer(s) with respect to the Transaction at any time and without giving a reason.

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